Wollongong's retail property market has experienced a slowdown in activity recently as owners and investors play the waiting game, a report suggests.
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A new report from property valuation and advisory firm Herron Todd White has analysed Wollongong's commercial/retail property market.
Scott Russell, commercial director, South East NSW & ACT said Wollongong's retail property market continues to be "subdued", with limited sales and leasing activity.
"This makes it difficult to prove where the market is positioned, with the slowdown in activity due in large part to uncertainty over the past 12 months created by the Banking Royal Commission and the state and federal elections," Mr Russell said.
"A lot of people were sitting on their hands over that period of time.
"It was difficult to obtain financing during that period, and from what I'm hearing it is still challenging to obtain financing."
Mr Russell said properties with secure, long-term leases and quality tenants were highly sought after.
He said there are "buyers around for the right type of asset" in Wollongong.
However, he said typically owners are reluctant to sell unless they can put their money into an alternate asset class which would generate the same level of rental return and capital growth.
"A lot of owners, they've got a property that they've had for a little while, and they may be getting an eight or 10 per cent return from it because they bought it in prior times.
"Where are they going to put their money that gets that equivalent return? So it's a challenge at the moment if you're an owner looking to re-position and find alternative investments, just because there's few investments for owners that would give them that level of return.
"There's limited sales because owners aren't selling.
"There are buyers around for the right type of property if it's got a good lease in place. There will be buyers to pick it up, but it's just almost a stand-off at the moment."
However, there have been exceptions, with Mr Russell noting the "most significant lease deal in the Wollongong CBD" recently was for the former Max Brenner space, located on the Keira Street frontage of Wollongong Central, to The Bavarian.
Location, view and condition priorities
What appeals to one set of home buyers can easily put off another, however there are a number of property fundamentals that apply to most Illawarra home buyers.
According to the Herron Todd White report, location, view and condition are recurring themes across all price points and have a significant impact on sale price.
"When we talk about first home buyers, we can be discussing different types of properties," Chris McKenna, residential director - South East NSW said.
"Singles or couples are often interested in Wollongong CBD units, townhouses in the suburbs and either older style suburban homes or newer houses in new subdivision areas.
"Upgraders buying a second home tend to be families where they have grown out of the first home and are looking for more space.
"A must have for prestige type buyers is a view. It doesn't matter if the prestige property type is a house, a unit or a rural lifestyle property, an ocean view is a consistent factor for residential sales in the Illawarra over $3 million.
"Recent sales such as Garaban Court, Bulli for $3.8 million, Cliff Road, Wollongong for $3.225 million or Penguins Head Road, Culburra Beach for $2.5 million all have significant ocean views in addition to their impressive improvements.
